A Product’s Design can be More valuable than the Product Itself GMAT Reading Comprehension

Reading Passage Question

Question: A product’s design can be more valuable than the product itself. With the advent of the personal computer in the 1970s, the computer-manufacturing sector, an industry then dominated by those giants able to afford incredibly specialized knowledge and to produce equally expensive products, suddenly found its brightest lights shining in the garages of clever engineers. Large manufacturers responded slowly but eventually arrived at a lucrative solution: IBM developed its own personal computer and permitted other manufacturers to copy its design in exchange for royalties. This move brought the computer giant’s greatest strength to bear—an enormous reserve of engineering brainpower—and ensured its continued control over a broad stretch of the personal computer market. At the same time, the broad selection of IBM “clones” available brought prices down and ensured the product’s mass-market appeal.

The upstart companies that gave older manufacturers so much trouble to begin with soon found themselves in a difficult situation. Despite their innovative operating systems, which converted computers from specialists’ tools into devices nearly as easy to use as toasters, these companies may not have reaped their full reward, as they have jealously held onto exclusive rights to manufacture the machines that run the new systems. Only recently have these smaller companies begun to license their hardware designs and operating systems, paving the way for clones of their own. Yet the young companies lag far behind both IBM and those software developers who have reaped huge rewards from the personal computer bonanza, leading many analysts to wonder if the smaller companies’ machines will remain the expensive luxuries that they have become in the home-computing market.

“A product’s design can be more valuable than the product itself GMAT Reading Comprehension.”- is a GMAT reading comprehension passage with answers. Candidates need a strong knowledge of English GMAT reading comprehension.

This GMAT Reading Comprehension consists of 7 comprehension questions. The GMAT Reading Comprehension questions are designed for the purpose of testing candidates’ abilities in understanding, analyzing, and applying information or concepts. Candidates can actively prepare with the help of GMAT Reading Comprehension Practice Questions.

Solution and Explanation

1. When discussing recent developments in the computer industry, the author of the passage indicates that

1. small companies will continue to take business away from their larger competitors
2. large computer manufacturers and small ones are seeking ways to cooperate in order to broaden consumer demand for personal computers
3. small computer manufacturers are beginning to seek ways to make their products available to non-specialists
4. large computer manufacturers are relying on software developers for most of their new products
5. small computer manufacturers are now adopting the innovations of the larger manufacturers

2. According to the passage, which of the following was an advantage possessed by large computer manufacturers prior to the emergence of small computer-makers?

1. Their ability to produce expensive products
2. The substantial resources at their disposal
3. Their ability to adapt quickly to changes in the computer industry
4. The high quality computers they were able to produce
5. Their development of the earliest personal computer prototypes

3. According to the passage, which of the following resulted from “cloning” in the computer industry?

1. The failure of younger, smaller computer manufacturers to realize their full potential
2. The creation of low-quality, low-cost home computers
3. The introduction of specialization into the computer industry

1. I only
2. II only
3. I and II only
4. I and III only
5. II and III only

4. Which of the following describes a solution most similar to IBM's response to the emergence of successful small computer companies?

1. A stockbroker spreads his investments across several industries in order to protect himself from the failure of any one industry.
2. A soft-drink corporation permits other soft-drink companies to use its manufacturing processes in creating competitive products.
3. A maker of pocket calculators recommends to its clients that they purchase its competitors’ products.
4. A publisher of large, leather-bound books sells the reprint rights to its catalog to a publisher of low-cost paperbacks.
5. A small bicycle company refuses to share innovative designs with competitors until it has gained a substantial share of the bicycle market.

5. Based on the information contained in the passage, which of the following Is true of the small computer industry?

1. It poses an insurmountable challenge to large computer manufacturers.
2. It compelled large computer manufacturers to reassess the way they do business.
3. It provides products that larger companies are unable to manufacture successfully.
4. |it will never catch up with the large computer manufacturers.
5. It was largely responsible for the widespread popularity and availability of personal computers.

6. The author of the passage refers to “garages of clever engineers" in order to

1. refute the widespread belief that large computer manufacturers are on the decline
2. illustrate the damage to the computer industry brought about by the popularity of the personal computer
3. point out how small computer manufacturers challenged the dominance of larger manufacturers
4. provide examples of how the computer industry has diversified in the past few decades
5. show how the computer industry has responded to recent changes in the economy

7. The primary purpose of the passage is to

1. criticize the policies of large computer manufacturers
2. describe the role of the computer manufacturing sector in American business
3. outline the role of small manufacturers in the computer industry
4. analyze the failures of the personal computer industry
5. discuss the history of the personal computer market

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